Joseph Wolfe
Vice President
Netherland, Sewell & Associates
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View from the Top

Guiding a Market Eager To Grow

Tue, 01/21/2020 - 19:27

Q: How does Netherland, Sewell & Aassociates (NSAI) ensure it provides the highest added value to its clients in Mexico?

A: NSAI began work in Mexico in 1996 and has evaluated almost every Mexican oil and gas field. This broad experience has resulted in extensive knowledge of all the Mexican producing basins, which is a significant advantage we can offer to our clients in the country. Our main clients are PEMEX and new operators and financial institutions that are just starting their operations in Mexico under the free-market scheme.

In the US, the Securities and Exchange Commission (SEC) reviews the reserves reports of public companies and asks relevant questions to protect investors to help them make informed decisions. Our job is to prepare the operators, based on the SEC’s guidelines, to be prepared to answer questions the SEC may ask. We do the same in Mexico, following CNH’s guidelines and requirements. Our services are not at odds with regulators like SEC or CNH; on the contrary, we help our clients to comply with the regulators’ requirements.

Q: Why did NSAI decide to offer its Annual Oil & Gas Property Evaluation Seminar in Mexico for the first time in 2018?

A: We have offered our Annual Oil & Gas Property Evaluation Seminar for over 20 years in Dallas, London and Singapore, with extremely good participant feedback. We brought the seminar to Mexico City for the first time with the objective of helping operators and financial institutions doing business in the country better understand how to assess an investment in oil and gas properties. We presented the seminar in Spanish to connect with local companies and to ensure that all interested Mexicans had the opportunity to attend and benefit from the material.

There is a huge financial market in Mexico eager to participate in the country’s oil and gas industry and ready to start investing. Meanwhile, there are as yet no financial mechanisms like Reserve Based Lending that facilitate the process of doing business. Many operators and financial institutions in Mexico lack experience regarding reserves evaluation, which leaves a clear gap that we can fill with our expertise. 

Q: What is NSAI’s secret for success?

A: The secret to our success is that we perform our evaluations based on raw data rather than beginning with the interpretations of our clients. This is why a company should choose NSAI over its competitors, because there is a difference. Our main differentiator is that we provide technical advisory services that are focused on truly listening to the client, understanding its position, helping it figure out why the interpretation of the data is either positive or negative and recommending ways to minimize risk and reduce uncertainty. We provide these services according to the data available and based on our global experience and best practices.

Q: What would NSAI like to achieve in Mexico by the end of 2019?

A: We would love to work with every operator present in Mexico to perform field studies, acquisition assessments, unitization agreements and other technical evaluations. We also would like to help all operators report their reserves to CNH. Unfortunately, this is not feasible due to regulation that caps the number of years operators can work with companies like ours to three consecutive years. One particular area in which we can offer operators a strong added value is in evaluating unconventional resources, which are just starting to be tapped in Mexico. 

For the financial sector, we want to help institutions fully understand international best practices and methodologies; should they choose to take part in financing of oil and gas projects, they can then make educated investment decisions. I believe we are the best reserves certifier in the country but I would like the Mexican industry itself to give us this recognition.

 

Netherland, Sewell & Associates is a worldwide petroleum consultancy that provides services such as reserves reports and audits, acquisition and divestiture evaluations, simulation studies and exploration resource assessments.